Beijing asks banks to hold required reserves in dollars
18 December 2007
China's central bank has stipulated that domestic banks set aside their required reserves in US dollars as opposed to yuan, the Wall Street Journal reported. Beijing has raised banks' required reserve ratio 10 times this year, including last week's increase to 14.5%, which doubled the increment of previous increases. The requirement that banks keep US dollars in their vaults and out of circulation is seen as an attempt to slow the pace of China's accumulation of foreign-exchange reserves and ease appreciation pressure on the yuan.